AkzoNobel: stable revenue in third quarter, price increases lift margin to 15.3%
AkzoNobel's revenue remained stable in the third quarter of 2026, at €2,538 million compared to €2,547 million a year earlier, but its composition changed: prices rose by 5% while volumes declined by 2%. The group indicated it was offsetting the increase in global raw material prices linked to the Middle East conflict, observed since the second quarter, through price increases.
This pricing policy enabled adjusted EBITDA margin to increase from 15.1% to 15.3%, a sixth consecutive quarter of improvement according to the company. Published operating profit, however, remained negative, at €-73 million, due to the deconsolidation of Russian entities and the disposal of the Pakistani subsidiary.
Adjusted EBITDA of €388 million, driven by organic growth
Organic sales growth reached 2% for the quarter. Scope changes (disposal of liquid coatings in India, deconsolidation of Russian entities) reduced revenue by 5%, offset by a currency effect and other items of +3%.
Adjusted EBITDA stood at €388 million, compared to €385 million in the third quarter of 2025. Organic growth contributed €15 million, against a negative scope effect of €21 million. Over nine months, adjusted EBITDA is stable at €1,131 million, with margin increasing from 14.6% to 15.1%.
Operating profit, at €-73 million against €-29 million, includes a charge of €230 million related to loss of control of Russian entities, placed under temporary external administration by presidential decree of July 13, 2026, as well as €46 million related to the Pakistani disposal. The third quarter of 2025 included a provision of €275 million in respect of the Australian Ichthys litigation. The group's net loss narrowed to €178 million, from €194 million. Adjusted EPS from continuing operations came in at €1.00, against €1.01 a year earlier and an analyst consensus of €1.03.
Decorative paints up, performance coatings slightly down
The two divisions evolved in opposite directions. In decorative paints, adjusted EBITDA margin increased from 17.4% to 19.4% and adjusted EBITDA rose from €184 million to €199 million, up 8%. Organic sales grew 5% in the Europe, Middle East and Africa zone, but declined 6% in Latin America, where volumes in Brazil were impacted by the timing of price increases, and 1% in Asia, due to weak demand in China.
In performance coatings, organic growth reached 3%, driven by prices, but adjusted EBITDA margin fell from 14.0% to 13.3% and adjusted EBITDA declined from €209 million to €201 million. Volumes in industrial coatings fell, notably in packaging, while aerospace advanced.
On the cash side, net operating cash flows stood at €187 million, against €331 million, mainly due to working capital requirements. Quarterly free cash flow fell from €265 million to €119 million. Net debt reached €3,090 million at September 30, 2026, compared to €2,942 million at end 2025, after €281 million in dividends paid; the net debt to adjusted EBITDA ratio stood at 2.1, compared to 2.8 a year earlier.
Asian sale to Nippon Paint for €1.2 billion and merger with Axalta underway
AkzoNobel indicated it targets an improvement of approximately €100 million in adjusted EBITDA at constant exchange rates, representing approximately €1.47 billion for 2026, based on end-2025 exchange rates and after adjusting for the disposal of liquid coatings in Asia. The leverage ratio is expected to be around 2 times at end 2026. In the medium term, the group targets an adjusted EBITDA margin above 16% and an adjusted return on invested capital between 16% and 19%.
On October 5, 2026, the group signed binding agreements to sell its Southeast Asian decorative paints to Nippon Paint, at an enterprise value of approximately $1.35 billion (€1.2 billion), for an expected net proceed of approximately €0.9 billion. This business represents approximately 3% of revenue; completion is expected mid-2027, except for Indonesia, expected end 2026.
The merger with Axalta, approved by shareholders of both groups on August 5, 2026, remains subject to regulatory approvals, with completion expected in early 2027. An interim dividend of €0.44 per share, identical to that of 2025, will be paid on November 4, 2026.
